Notion VTec back in the red on lockdown impact and rising metal costs

TheEdge Wed, Sep 29, 2021 07:23pm - 2 years View Original


KUALA LUMPUR (Sept 29): Notion VTec Bhd was back in the red with a net loss of RM11.32 million for the third quarter ended June 30, 2021 (3QFY21), after three straight quarters of profit.

The hard disc drive (HDD) component maker had reported a net profit of RM3.16 million for the immediate preceding quarter.

In a filing with Bursa Malaysia, the group said its machining business was affected by the movement control order, rise in metal cost of up to 60%, and labour shortage.

Additionally, its globe manufacturing business incurred start-up expenses, as new lines were ready for testing and commissioning, the group said.

Revenue for the quarter rose 5.42% to RM89.2 million, from RM84.61 million in 2QFY21.

On a year-on-year basis, Notion VTec reported a wider net loss compared with RM10.86 million in 3QFY20, despite revenue jumping 122.71% from RM40.05 million.

For the nine-month period ended June 30, the group’s net loss widened to RM5.14 million from RM446,000 a year earlier. Cumulative revenue rose 38.48% to RM239.16 million, from RM172.71 million.

On its prospects, Notion VTec expects its HDD, auto and electronics manufacturing service sectors to recover after completion of the second dose vaccination programme by employees of the Klang and Johor factories, and also the recovery of markets in line with a better Covid-19 situation globally.

Meanwhile, it said both its face mask and glove businesses are expected to be good for the foreseeable years, as Covid-19 turns from being pandemic to endemic with demand for healthcare products to be reasonably strong.

Currently, three of the group’s nitrile glove lines are operating, while another three will be ready between October and December.

“The trading of gloves continues to be substantially more than the produced gloves. The ASP (average selling price) of nitrile gloves has dropped sharply to the US$4 to US$5 range per box of 100 gloves but our supplier’s prices are lower in accordance with market prices and lower demand conditions.

“The nitrile glove is a high-volume commodity business and challenges are found in maintaining good quality, funding and finding markets for the product and managing risks,” it added.

Notion VTec’s share price closed down 0.5 sen or 0.83% to 60 sen on Wednesday, for a market capitalisation of RM309 million.

The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.






Related Stocks

BURSA 7.450
NOTION 0.445

Comments

Login to comment.